Retailers can now analyse the movements of their customers on the ground using analytics packages like Euclid and ShopperTrak. Photograph: Alamy

At the Fairson's department store, managers can measure the number of people who walk past the store, the number who come through the front door – and this information includes whether or not they went in immediately or were convinced by the shopfront.

Once shoppers are inside the store, managers can find out how many of them walked up to the second floor and compare with the number of people who took the journey to the second floor last week.

If more people have gone up this week, they'll probably conclude that the marketing banners that they put up towards the beginning of the week are working.

In this scenario, Fairson's is imaginary, but this technology is very real. One firm, the California-based analytics firm Euclid, is hoping to encourage wider take up of tracking technology by offering Euclid Express, which offers retailers a free analytics solution for brick-and-mortar shops.

The announcement means that any retailer – from a local coffee shop to a large department store – will be able to implement an analytics package to receive information such as footfall outside the store, engagement (how long customers spend inside stores) and whether customers are repeat shoppers, at no cost.

Retailers will also be able to compare trends over time, which, for example, could be used to monitor the efficacy of a particular marketing campaign.

Why is it free?

There are a number of companies competing in the retail analytics space, such as ShopperTrak, Retail Next, Nomi and Prism Skylabs. These companies all argue that retail analytics only balances the scales, as online retailers have been doing this for years.

"When you look at something on the web, you get ads that pop up and follow you around – companies like that have much better advantage over bricks-and-mortar retailers and so they're under more pressure to equalise the playing field," ShopperTrak's chief executive Kevin Kearns told the Guardian.

ShopperTrak provides two main services to clients. The first is their "managed service", which counts the number of shoppers in a store at any given time through small devices placed at the entrance and exits to stores. The aim: if managers can predict the number of shoppers at any given time, they can ensure that there are an adequate number of staff.

Euclid's announcement is significant, however, because it is currently the only offline customer analytics platform available for free – and this provides it with a strong competitive advantage.

Euclid wants to lower the barriers of entry so there's no longer a reason for businesses not to implement their technology. This also helps to explain the introduction of Euclid Zero, announced in late 2012, which took away the need for companies to install sensors within their stores, instead allowing retailers to simply switch on the Euclid feature feature within their Wi-Fi management console to connect to their cloud-based analytics service.

Businesses were then able to monitor customer behaviour via their smartphones that had enabled Wi-Fi. Euclid would collect media access code (MAC) addresses – each phone has a unique MAC address – and scramble the code to anonymise the data before storing it on their servers.

But retailers on the Express package only receive data from within their own stores. "The metrics that we collect provide some [information]," said Adam Wilson, Euclid's chief marketing officer, "but we understand that more context is needed to build a more detailed profile to help marketing be more detailed," Wilson said.

Why would retailers pay to access the advanced edition?

As part of the advanced package, Euclid integrates their own market data with that of the retailer to add more contextual information.

"So if a customer shows up at three different locations, it might be possible for us to infer information about gender, or about specific age range. There are ways in which we can look across the anonymous data set and even though we don’t collect any personally identifiable information, we might be able to predict their age," Wilson noted.

Retailers can't access specific information about any other brands but instead receive an aggregated metric. And this explains why Euclid Express is an intelligent move. By signing up to track their customers, retailers are giving Euclid billions of data points. They currently receive 6bn "measurements" daily (the number of times they collect Wi-Fi pings), according to Wilson, which translates to over 250m shopping sessions per year.

So once retailers sign up to the free package, they're allowing any competitors who fork out for the advanced edition ($100 per store/month) access to their data, even if it is on an aggregated level. And businesses are willing to pay to quell that kind of curiosity.

What about consumer privacy?

Throughout the conversation, Wilson repeated the phrases "no personally identifiable information" and "aggregated data" a number of times – and he also stressed that Euclid "have gone to make sure the privacy of the individual is protected. And that’s an important part of our DNA and our entire approach to the market."

Indeed, Euclid were part of the group that launched the Mobile Location Analytics code of conduct, endorsed by New York Senator Chuck Schumer. The code of conduct, which calls for companies to have consent if they collect personal information and for a central opt-out site for consumers, was also praised by the Federal Trade Commission for "[recognising] consumer concerns about invisible tracking in retail spaces and [taking] a positive step forward in developing a self-regulatory code of conduct."

But it's worth noting that the code of conduct was signed in October and is the likely result of customer outrage when they were made aware that they were being monitored. When American department store Nordstrom put up a sign, in May 2013, announcing that they had been piloting the technology for months, they received a number of complaints directly to their store but also on social media.

The potential for the technology also means that it could unnerve many. "I would think permission would need to be granted to use something that belongs to someone else. Even if it is just a signal," one consumer posted on Facebook.

Renew planned on using the data they were collecting to provide personalised advertising on their digital screens. "Why not Pret", is a message that might be displayed to a regular visitor of Starbucks. Over time, Renew could also tell whether you’ve altered your habits.

But Renew's CEO was adamant that this was not personal information. "As long as we don't add a name and home address, it's legal," he told me when it was first revealed that they were tracking customers.

This adds a new dynamic to the conversation. As it stands, Euclid provide only aggregate information from across their US monthly benchmarks but there is potential for more personalised marketing. A coffee drinker visiting a store might see a message informing them of a coffee shop on the second floor, for example. Although the company would not know who they were marketing to specifically, they would still understand their shopping habits.

Emma Carr, the deputy director general of Big Brother Watch, believes that the technology ignores customers' privacy, and branded it "disproportionate".

"This is a clear example of profit trumping privacy," she said. "The use of surveillance technology by shops, in order to provide a better or more personalised service, seems totally disproportionate."

Carr also stressed the importance of consumer awareness and said that while the technology was still developing, there is an obvious goal in mind, to identify individuals.

"Loyalty cards were the start of the process, but as the race for data intensifies, the surveillance of shoppers is becoming more invasive. This won't stop at generalities like how long customers spend in stores - the long game is about identifying individuals and this technology is getting very close to enabling them to do that.

"It is not only essential that customers are fully informed if they are being monitored,but that they also have real choice of service and on what terms it is offered."

This type of personalised Minority Report-style marketing is now bringing about a new conversation: is your MAC code your personal information?

Do you think that physical analytics – or a Google Analytics for the online world – is just the next logical step for brick-and-mortar stores to survive against a competitive online environment? Continue the debate with @sirajdatoo and @guardiandata or comment below the line.